Apple Working On Larger, Cheaper iPhone For 2013 Launch?

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New reports shed light on Apple's plans to launch a low-cost iPhone in emerging markets in the second half of 2013.

The manufacturing cost of the phone will be kept as low as possible by using less expensive or recycled parts from older iPhone models, but the cheaper iPhone will sport a larger display than iPhone 5, according to the latest reports.

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Citing supply chain sources, DigiTimes reported on Jan. 8 that Apple is aiming to release the cheaper iPhone in China and other cost-sensitive markets. The low-cost iPhone will have a larger screen, which the site claims will meet the "prevailing trend for the adoption of 5-inch displays for high-end models."

Additionally, a Wall Street Journal report also asserts that the Cupertino tech giant is working on a cheaper iPhone.

"Apple Inc. is working on a lower-end iPhone, according to people briefed on the matter, a big shift in corporate strategy as its supremacy in smartphones has slipped," WSJ reported.

According to WSJ's report, the low-cost iPhone could resemble the standard iPhone, but with cheaper body. Apple could opt for a cheaper build material to minimize manufacturing costs. The phone could use a back plate made of polycarbonate plastic, rather than aluminum-built and glass shell. Internals, such as processor and memory chips, could be sourced from parts for older iPhone models.

Reportedly, Apple is targeting cost-sensitive markets such as China and India, where the high price of iPhone is a big concern. According to the Wall Street Journal, Apple has been working on the low-cost iPhone for years, but failed to decide how to get forward with the device.

Apple's new smaller tablet - the iPad mini, is a massive success in China. Since the tablet released in China in late 2012, both mainland China and Hong Kong experience out-of-stock or limited availability for the iPad mini.

China is the second largest market of Apple products. However, iPhone sales in the country are not strong due to expensive pricing and competition from local smartphone makers, such as Huawei, Lenovo, and ZTE.

Launching a cheaper iPhone would be a risky move for Apple. Apple avoided the cost-conscious segment of the market and never targeted specific markets with specific products in its history. However, the massive success of iPad mini in China may convince Apple to take a chance.